The death of neoliberalism from within • Hacker News Board

Re: The death of neoliberalism from within

#81

Post by kiruwa » Fri, Jun 03, 2016, 6:33 PM UTC

bubbleRefuge wrote: post #76

icebraining wrote: post #60

Earlier quoted context omitted.

Noam Chomsky, that rabid right-wing libertarian: What’s called the capitalist system is very far from any model of capitalism or market. Take the fossil fuels industries: there was a recent study by the IMF which tried to estimate the subsidy that energy corporations get from governments. The total was colossal. I think it was around $5 trillion annually. That’s got nothing to do with markets and capitalism. https://…

OMG. Very true. The hypocrisy is sickening and finally people are waking up to it. For example, look at Paul Ryan. Tea Party, no-liberal , yada, yada, yada comes from a privileged wealth family owning a construction business fed from government contracts.

Uhm... no. Him being from a wealthy family is not an example of hypocrisy. Nor is his family business being fed with government contracts. You've _badly_ misunderstood the issue if you think that's hypocrisy.

The question is... has he been a strong proponent of extra licensing requirements for government contractors. Licensing requirements that his family is able to easily handle, but will push out smaller competitors. That would be hypocrisy.

Has he supported legislation against subcontracting or legislation that artificially limits who the government (or private industry) can hire?

It's not hypocritical to offer services to the government. You're confusing neoliberals with anarchists.

Re: The death of neoliberalism from within

#82

Post by generj » Fri, Jun 03, 2016, 6:33 PM UTC

marricks wrote: post #55

kiruwa wrote: post #47

Earlier quoted context omitted.

> You're blaming government regulations! That's absurd given many people at this point have said that 1) That's not actually what he said. He said that the regulatory apparatus is currently working to assist rent-seeking and pushing wealth to the "1%". Regulation has been used to protect the wealth of the wealthy from the consequences of a free market, at everyone else's expense. 2) Argument from consensus isn't actu…

1) I'm discussing the narrative, the poster only cites over-regulation as a problem, which I haven't seen bail-outs called before. The language implies government rules are the problem. 2) Many notable economists actually blame deregulation, such as Alan Greenspan & the SEC [0]. I think the man who oversaw much of the deregulation while it was happening calling it a problem in hindsight is a pretty darn good indicati…

Per point 2, Greenspan is kind of the worst person to make that call. There's a very good argument that he explicitly allowed that deregulation and coupled it with a series of bailouts, resulting in the "Greenspan Put". This moral hazard was then combined with very cheap credit, all at his insistence. I'd take anything Greenspan has to say about the economy with a few metric tonnes of salt - as would many people who served on the Fed Board with him. The documentary 'Money for Nothing' is a great laymen's view on this.

Similarly, the SEC isn't a super credible economic source for several reasons. One being if you are smart enough to work at Goldmans you don't work at the SEC. It's pretty self-serving for the agency in charge of regulation to argue that de-regulation was harmful. Do you know the specific economists making this argument? I'm very skeptical until I see names, and then my skepticism decreases while reading the actual paper.

I would argue that deregulation was not the central issue - which was a rise in activities which circumvented regulation, like off-balance bank trading. Greenspan shielded these new fields from regulation, and the resulting over-leverage killed banks. In addition, overly cheap credit made these activities and mortgage in general overly attractive.

There is a lot of evidence for this view, mostly in the multitude of institutions and industries which all had problems simultaneously. You can view this as a coincidence or you can view it as industries responding to incentives set by Greenspan.

TLDR Greenspan caused the housing bubble.

Re: The death of neoliberalism from within

#83

Post by Houshalter » Fri, Jun 03, 2016, 6:36 PM UTC

wfo wrote: post #42

elgabogringo wrote: post #13

Neoliberalism is not a school of economic thought. It's not an actual ideology that anyone associates themselves with. It's a word without any concrete meaning thrown around in order to avoid real discussion. The free market is not failing. Current markets that are failing are hardly "free." What is failing is a system of government regulation and control that supports wall street and the rich at the expense of the m…

Of course it is an explicit ideology that many associate themselves with (though not by name, since it's become something of a slur because it's so obviously religious about the "free market" and hated because of this). It's explained clearly in TFA. Of course, the classic rabid libertarian answer -- any time any economic failure happens, blame regulations. When we free the markets, and the markets fail to provide an…

I hate how "regulations" and "deregulation" has been reduced to a word that you are either "for" or "against" based on your political affiliation. As if regulations are all either entirely good, or entirely bad. I mean c'mon, do you really believe there has never been a bad regulation?

Free markets tend to produce the most wealth. Some regulations are necessary to prevent market failures like monopolies, information asymmetry, etc. But otherwise they are just getting in the way and causing more damage than good.

Regulations are not going to create a middle class or create economic equality. They can only prevent certain abuses from happening, but you can't regulate "equality".

The reality is some portion of the population doesn't have very much economic value. It's crazy and inefficient to try to artificially increase their value by protecting their jobs from competition. Instead we should tax the wealth that capitalism creates, and redistribute it more fairly.

Re: The death of neoliberalism from within

#84

Post by emblem21 » Fri, Jun 03, 2016, 6:37 PM UTC

We are witnessing the death of the hypervisor (global banking), not the virtual machine (nation-state agreements) or the underlying operating system (cultural norms) or the underlying hardware. (nature)

Re: The death of neoliberalism from within

#85

Post by kiruwa » Fri, Jun 03, 2016, 6:37 PM UTC

logfromblammo wrote: post #62

wfo wrote: post #42

Earlier quoted context omitted.

Of course it is an explicit ideology that many associate themselves with (though not by name, since it's become something of a slur because it's so obviously religious about the "free market" and hated because of this). It's explained clearly in TFA. Of course, the classic rabid libertarian answer -- any time any economic failure happens, blame regulations. When we free the markets, and the markets fail to provide an…

A truly free market has a price for contract killings--including, for instance, the current CEO of Bank of America, or the current chairman of the Fed, or someone like Bernie Madoff. If the wealthy make a figurative "killing" abusing the poor, the poor turn around and make a literal killing. An unethical executive would have to hole up in a fortified compound and surround it with hired guns, just like a Mexican drug…

This is rather silly. You've altered the definition of "free market" to the scope of things on the market, rather than the regulation of the market itself.

Although some free marketers (and many others) argue that things like prostitution should be "liberated" from prohibition, that's generally tangential to the arguments.

Usually, legal arguments about what can be bought or sold are settled in social/political terms, economics isn't really all that relevant.

Re: The death of neoliberalism from within

#86

Post by generj » Fri, Jun 03, 2016, 6:40 PM UTC

bubbleRefuge wrote: post #77

ewzimm wrote: post #73

Earlier quoted context omitted.

I have encountered a few people who do argue that government regulation caused the economic crisis. It seems to be the dominant understanding in the conservative media in the United States, possibly elsewhere. The reasoning goes something like this: people in government wanted to redistribute wealth by building up impoverished minority communities, so they incentivized otherwise responsible banks to lend money to peo…

You may answer them by stating the fact that bank management committed fraud by making loans based on false appraisals and false documentation provided by borrowers and then selling these "assets" (with the help of corrupt ratings agencies) to uninformed institutional level investors . As intermediaries banks profit from the transaction fees. This is fraud plain and simple. The public at large doesn't understand the…

Absolutely.

The banks further profited by investing their own money - something we then prohibited them from doing, as it made them far too risky. Essentially the banks had abnormally high returns, which is almost always a sign of high risk. The entire purpose of regulation is to force the banks to be boring, low-risk low-return options so they have a very low chance of failing. People seeking high-returns can then go to the stock market or hedge funds, which are much less likely to be 'too big to fail'.

The public is also unaware that nearly every substantial banking regulation was created as the result of a bubble, recession, or depression. We need strong bank regulations in order to prevent financial crises which can cause global depressions.

Throwing away regulations when everything is going well is much like throwing out all that error-handling code your application has built up over a decade. Sure, you get better performance initially...

Re: The death of neoliberalism from within

#87

Post by kiruwa » Fri, Jun 03, 2016, 6:43 PM UTC

marricks wrote: post #55

kiruwa wrote: post #47

Earlier quoted context omitted.

> You're blaming government regulations! That's absurd given many people at this point have said that 1) That's not actually what he said. He said that the regulatory apparatus is currently working to assist rent-seeking and pushing wealth to the "1%". Regulation has been used to protect the wealth of the wealthy from the consequences of a free market, at everyone else's expense. 2) Argument from consensus isn't actu…

1) I'm discussing the narrative, the poster only cites over-regulation as a problem, which I haven't seen bail-outs called before. The language implies government rules are the problem. 2) Many notable economists actually blame deregulation, such as Alan Greenspan & the SEC [0]. I think the man who oversaw much of the deregulation while it was happening calling it a problem in hindsight is a pretty darn good indicati…

> I'm discussing the narrative

No, you're discussing your narrative... which doesn't have much to do with the post you replied to.

Greenspan is rather heavily implicated as one cause of the problems. But he's attempting to shift the blame to the political side, rather than the economic side he was responsible for. He may actually be right, but I wouldn't take his word for it just because he was there. He's joined by political hacks pretending to be economists (like Krugman), and a few genuine economists. But it's far from agreed-upon.

Re: The death of neoliberalism from within

#88

Post by dragonwriter » Fri, Jun 03, 2016, 6:47 PM UTC

kiruwa wrote: post #85

logfromblammo wrote: post #62

Earlier quoted context omitted.

A truly free market has a price for contract killings--including, for instance, the current CEO of Bank of America, or the current chairman of the Fed, or someone like Bernie Madoff. If the wealthy make a figurative "killing" abusing the poor, the poor turn around and make a literal killing. An unethical executive would have to hole up in a fortified compound and surround it with hired guns, just like a Mexican drug…

This is rather silly. You've altered the definition of "free market" to the scope of things on the market, rather than the regulation of the market itself. Although some free marketers (and many others) argue that things like prostitution should be "liberated" from prohibition, that's generally tangential to the arguments. Usually, legal arguments about what can be bought or sold are settled in social/political terms…

Most free market advocates (and lots of people who aren't particularly inclined that way ideologically, but who analyze impacts of policy rather than superficial forms) view prohibitions (and the associated enforcement) as just one form of imposition of regulatory costs on a transaction.

> Usually, legal arguments about what can be bought or sold are settled in social/political terms, economics isn't really all that relevant.

The difference between "social/political" and "economic" is superficial.

Re: The death of neoliberalism from within

#89

Post by generj » Fri, Jun 03, 2016, 6:50 PM UTC

Snargorf wrote: post #36

djsumdog wrote: post #30

Earlier quoted context omitted.

Markets don't exist without States. You cannot have a market without a State, and therefore you cannot have a "free market". They don't exists. The idea that there is or can be a free market is one of the great myths of our civilization (along with the idea that humans started out with barter based economies. We didn't. The earliest economies in human history were based around credit). I highly recommend the book Deb…

Markets don't exist without states? Do you not believe that markets existed 1000, 2000, 5000 years ago, in areas that were tribal or feudal or in anarchy? Do you not believe that markets exist in Somalia and other conflict zones today, where there is no functioning government? Markets exist any time there are two or more people with goods that they could and would trade.

1) Tribes/Feudal Lords ARE government, albeit often not effective/efficient government.

2) You'll find that in an anarchy situation, mysteriously there is some market governing force...like a tribe, or guilds, or even just a shared understanding of how the market/society is to function. Even mob justice is a sort of governance, and the definition of what the mob will allow before uprising is the law of the land...

3) While there are markets in conflict zones, they aren't free markets. Free markets by definition require things like homogeneous products and perfect information. Perfect information has never existed in a conflict zone, and it never will.

4) In order for a market which approaches "free" to exist, there must be some governing entity to setup and enforce rules of trade, fund basic infrastructure which the market relies upon, provide peace which minimizes volatility for the market, etc. Even the staunchest of free market economists have made this point for centuries. Adam Smith and Friedman both are very much in favor of governments in some fashion or another.

I guess you could say that markets exist without governments, but they certainly aren't efficient ones.

Re: The death of neoliberalism from within

#90

Post by generj » Fri, Jun 03, 2016, 7:12 PM UTC

djsumdog wrote: post #52

areyoucrazy wrote: post #39

Communists have been saying neoliberalism(nonsense term, which serves as an insult)/capitalism is going to fall, but it ain't happening. It's stronger than ever. They're like Christians expecting rapture.

Are you serious? Capitalism has been failing most of this planet! You just don't think it's failing because you live in a mid-to-high income nation. One day those nations will run out of others to have war with and steal from. The earth has a lot of resources, but it's finite. This will all end one day.

That is so very far removed from the historical reality.

Look up a chart of Global real GDP/capita over time. You may suspect that all this wealth goes to the wealthy (unlikely even from a historical perspective, look at all the servants Bill Gates doesn't have that even a slightly well-off English family would have). If you think this, you can lookup a chart of GDP/capita growth per country across the world. Failing this, there are charts with real GDP growth split across income levels (though not for all countries).

Failures in capitalism are usually a failure in governance. It's no surprise at all that countries with repressive or unstable regimes have the worst economies. Many countries which were once poor are now rich - even over the lifespan of people still living. The Asian tigers went from terrible conditions to skyscrapers in less than 30-40 years. People's grandchildren could expect to make 7 to 8 times as much as their grandparents.

Every country is better off today than it was in the 1500s, 1600s, 1700s, 1800s, and the start of the 1900s. Wars are less frequent for almost the entire globe.

You have a failed understanding of economics. We don't compete/steal from others when our quality of living goes up. Instead, we raise the quality of living of others. Look at China: when they started making our consumer goods, many people's quality of living went from mud huts to apartment high-rises with Starbucks downstairs. And we didn't really lose out - on average, we found new types of jobs, mostly service jobs, which it turns out we can do more productively than we could produce consumer goods.

Look, the Earth has many more resources than we are currently using. We could produce food for the world with only a tiny fraction of the world's irrigated land. If we run low on a particular resource, we will pivot past that rarity with engineering, both social and physical. Malthusian predictions have thus far all failed spectacularly. In fact, the more population we have, the more specialized we can be, and the better off we are. It's not theory - it's what history has shown us, over and over again, across the world.